What Are Revenue Participation Tokens?
Investing aims to save or grow wealth over time.
Traditionally, investing is cash-based, involving stocks or precious metals.
However, holding cash can lead to constant loss due to inflation or negative interest rates.
In light of this, blockchain technology offers alternative investment options, including cryptocurrencies and tokenization.
Innovative Investment
Revenue participation tokens are one such use of blockchain technology for investing.
Instead of directly tokenizing ownership rights to a company’s future profits, which can face legal challenges, a revenue participation model utilizes a two-token system.
This model is based on the well-established legal concept of usufruct and involves a participation token and a payout token.
In this model, companies with stable income tokenize percentages of their future profits and sell these tokens to investors.
The participation token represents ownership rights to a specific percentage of the company’s revenue.
It functions like a gift card or IOU, granting the owner the right to a specific value from the company.
Tokenized Revenue Sharing
When the time comes for the revenue percentage to be paid out, it is dispersed in the form of a payout token. This token can be redeemed for fiat currency or cryptocurrency or sold on an exchange.
The revenue participation model offers flexibility to both companies and investors, surpassing the limitations of traditional equity/dividends systems.
Stable Investments
By purchasing revenue participation tokens from stable and reliable industries, such as agribusiness, investors can expect a predictable return on their investment.
While it may not yield substantial dividends, it is a safe and un-speculative investment that acts as a hedge against inflation or negative interest rates.
Additionally, it provides multiple options for exiting investments, all while supporting meaningful companies.